Kusserow on Compliance: Board compliance experts and certifications under corporate integrity agreements

The HHS Office of Inspector General (OIG) now requires the engagement of independent compliance experts in its corporate integrity agreements  (CIAs) to assist it in meeting its obligations of compliance program oversight. This trend has been part of a movement to hold members of governing boards more accountable for such oversight.  Those engaged as compliance experts must create a compliance review work plan, perform the program review, and provide a compliance program review report.  The report has to describe the review performed, findings, and any recommendations for program improvement.  The board must review the report and act upon any findings and recommendations. A copy of the report must be sent to the OIG as part of each CIA Annual Report.   In addition, the OIG can access to any materials provided by compliance expert, as well as any minutes of meetings must be available to OIG upon request

Carrie Kusserow has a long history as a compliance officer, as well as a compliance consultant working on compliance with CIAs.  She noted that the “real game changer” in CIAs has been the movement towards increased certifications by executives, compliance officers, and board members.  Board members now have the burden to adopt and sign a resolution for each CIA reporting period.  This is serious business, in that making false certifications could criminally violate 18 U.S.C. §1001.  In order to hold boards fully accountable, they mandate that they engage a compliance expert to assist them in carrying out their compliance program oversight and to assist them in being able to make their certification, so, selecting the right compliance expert is critical. Once selected, they are likely to have them doing this work for five years.  She also warns that time is not an ally when CIAs are signed.  The attorneys handling the litigation and settlement process often are working ahead of the organization and those that will have to implement the terms and conditions of the CIA.  What this means is that many organizations find themselves in a race against time to do all that is required, including engaging independent review organizations and compliance experts.   She advises organizations moving toward settlement to begin looking and evaluating potential parties to be engaged as outsider experts.

Tom Herrmann, J.D. had many years experience with the OIG in managing the CIA process, as well as being engaged by numerous organizations in meeting CIA obligations.  He believes that it is important to remember that moving from settlement to meeting obligations under a CIA is also moving from parties advocating on behalf of the organization to parties assisting in meeting the requirements that have been agreed to. He speaks from firsthand experience when he says that the OIG does not like parties trying to re-litigate a case and any effort to do so will likely prove counter-productive.  This means that the compliance experts engaged must focus implementation on the terms of the agreement.  To do this, they must be free of any conflicts of interest, if they are to meet the independence and objective standards required by the OIG.  The OIG wants to see organizations select true experts who will carry out their responsibilities with independence and integrity.  He agrees that the more experience that parties have as experts under the CIA, the better they are known to the OIG and more credible will be their work.

Selecting compliance experts

  • An independent expert must be properly qualified to perform the work described in the CIA.
  • Work to be performed consists of operational reviews, not financial audits.
  • Focus is on compliance program expertise.
  • A CIA may require several different types of expert (e.g. IROs, compliance experts).
  • Those selected should be qualified and experienced in the industry sector covered by CIA.
  • A lack of expertise in area engaged equals potential problems with OIG.
  • Sub-standard reports risks loss of compliance credibility.
  • Work performed by experts must be professionally independent and objective.
  • Compliance Experts follow GAO GAGAS standards for operational reviews.
  • Experts should certify to OIG professional standards.
  • Ensure and seek certification that the experts have no conflicts of interest with the entity.
  • Check references.
  • Steve Forman, CPA has been engaged as a compliance expert on behalf of several organizations. Based upon his experience, he offered tips on how to go about selecting an outside compliance expert. He believes it is very important engage parties with considerable experience doing this kind of work.   Using people inexperienced in compliance as compliance experts is risky. Those lacking experience tend to be more costly, as they charge for their time in learning what needs to be done at the expense of those that have engaged them. The more experience they have doing this kind of work under a CIA, the better. As a result, it is advisable to find experts who have been engaged by entities under CIAs on multiple occasions. This also permits reference checking on how well they did with organizations that used them. He also added that serving many years as a compliance officer, along with experience as a health care consultant, was critical in being able to deal with real and practical considerations in acting as a board Compliance Expert. He believes having that combination of experience provided those organizations using his services with the most efficient results.
  • Did the firm meet its obligations satisfactorily?
  • Were there any problems?
  • Did the OIG find a firm’s work satisfactory?
  • Did a firm perform services economically and efficiently?
  • Was a firm sensitive to the entity’s operations and needs?
  • Was a firm’s work professional, competent, and timely?

One last piece of advice for compliance officers is that they educate their boards on this new trend, whether or not the organization may be involved in settlements with the government. What the OIG mandates is what it believes all organizations should follow–greater board oversight of the compliance program.  All boards should add members who are “compliance literate” and/or secure outside experts to advise them on the progress in development of an effective compliance program

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2017 Strategic Management Services, LLC. Published with permission.